Date: 05-21-2002

Case Style: Florence Krondes, et al. v. William O'Boy, Sr., et al.

Case Number: AC 19292

Judge: Schaller

Court: Connecticut Court of Appeals

Plaintiff's Attorney: Ridgely W. Brown

Defendant's Attorney: Irve J. Goldman

Description: The defendants William O’Boy, Sr., and his wife, Carmela B. O’Boy, appeal, and the plaintiff Florence Krondes1 cross appeals from the judgment of the trial court, rendered after a jury trial, awarding damages to the plaintiff. On appeal, the defendants2 argue that the court improperly refused to set aside the verdict because the automatic stay pursuant to 11 U.S.C. § 362 voided any trial court action between the filing for bankruptcy and the bankruptcy discharge.3 The dispositive issue on appeal is whether the stay operated to void actions taken by, and the judgment of, the trial court. We reverse the judgment of the trial court and remand the case for a new trial.

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On May 14, 1993, Florence Krondes received an award of $259,896 against William O’Boy, Sr., and William O’Boy, Jr., for breach of contract. See Krondes v. O’Boy, 37 Conn. App. 430, 656 A.2d 692 (1995). On December 15, 1993, the plaintiff filed a complaint seeking to set aside a fraudulent transfer by William O’Boy, Sr., to Carmela O’Boy of property at 10 First Street, Norwalk. William O’Boy, Sr., owned a one-half interest in the subject property until he transferred that interest to his wife by quitclaim deed dated December 5, 1990, for the consideration of ‘‘love and affection.’’ The three count complaint alleged fraudulent transfer, violations of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes 42-110a et seq., and violations of the Racketeering Influenced and Corrupt Organization Act (RICO), 18 U.S.C. § 1961 et seq.

On April 4, 1997, William O’Boy, Sr., voluntarily filed for relief under chapter 7 of the United States Bankruptcy Code, 11 U.S.C. § 107 et seq., and filed a notice of stay with the Superior Court on April 7, 1997. The Bankruptcy Court granted William O’Boy, Sr., a discharge by notice dated June 12, 1998.4 The defendants filed a motion in limine in state court to remove William O’Boy, Sr., as a party defendant, but the court denied the motion.

A number of events transpired between the bankruptcy filing and discharge. On June 30, 1997, the plaintiff issued a notice of deposition of Carmela O’Boy. On August 8, 1997, the plaintiff deposed Carmela O’Boy. The court scheduled pretrial conferences on December 2, 1997, trial for November 25, 1997, and a continuance of trial for June 15, 1998. The jury selection process also took place at that time, and the jury was sworn in on July 7, 1998. The record does not reflect precisely how many jurors were selected prior to William O’Boy, Sr.’s discharge in bankruptcy.

On July 10, 1998, the defendants filed a motion for a directed verdict on all counts. On July 14, 1998, the court denied the motion as to the fraudulent transfer claim, but granted the motion as to the CUTPA and RICO claims. The court did not issue a memorandum of decision on the motion, nor did the plaintiff file a motion for an articulation of the basis for the decision.

On July 14, 1998, the jury found that William O’Boy, Sr., had transferred his one-half interest in the real property at 10 First Street to Carmela O’Boy with intent to hinder, delay or defraud his creditors, including the plaintiff. The jury further found that William O’Boy, Sr., had conveyed the interest without substantial consideration. The jury also found that the plaintiff had established that William O’Boy, Sr., had conveyed his interest in the property with the intent to defraud the plaintiff. The jury awarded economic and punitive damages of $341,314.54 against Carmela O’Boy. The jury awarded no damages against William O’Boy, Sr.

The defendants filed motions to set aside the verdict and for judgment notwithstanding the verdict on the ground that there was insufficient proof that the property transfer rendered William O’Boy, Sr., insolvent and that there was insufficient evidence that Carmela O’Boy had the requisite intent to defraud when William O’Boy, Sr., conveyed the property. The defendants also filed motions for remittitur and to set aside the verdict as excessive, claiming that on April 14, 1997, William O’Boy, Sr., had filed for relief under chapter 7 of the United States Bankruptcy Code and filed a notice of stay dated April 4, 1997, with the Superior Court. William O’Boy, Sr., in the bankruptcy proceeding, had listed the plaintiff as a creditor and included a reference to the verdict against him that was rendered on May 14, 1993, and the Bankruptcy Court granted him a discharge under title 11 of the United States Code, § 727, on June 12, 1998. The trial court denied the motions on January 13, 1999. Additional facts will be set forth as necessary.

Our standard of review for a challenge to a denial of a motion to set aside a verdict is as follows. ‘‘The evidence must be considered, along with reasonable inferences, in the light most favorable to the parties who were successful at trial with weight given to the judgments of the judge and jury. . . . The verdict will be set aside and judgment directed only if we find that the jury could not reasonably and legally have reached their conclusion. . . . A trial court may set aside or direct a verdict on a finding that the verdict is manifestly unjust because the jury, on the basis of the evidence presented, mistakenly applied a legal principle or because there is no evidence to which the legal principles of the case can be applied. . . . While we do not attempt to substitute our judgment for that of the trial judge, we must determine whether the jury award was such that the trial judge could have properly substituted his judgment for that of the jury. . . . To determine whether the trial court abused its legal discretion, this court must consider the entire record and all of the evidence.’’ (Citations omitted; internal quotation marks omitted.) Medcalf v. Washington Heights Condominium Assn., Inc., 57 Conn. App. 12, 15–16, 747 A.2d 532, cert. denied, 253 Conn. 923, 754 A.2d 797 (2000). ‘‘A trial court’s ruling to set aside the verdict will not be overturned on appeal unless the trial court abused its discretion.’’ (Internal quotation marks omitted.) Tolbert v. Connecticut General Life Ins. Co., 58 Conn. App. 694, 698, 755 A.2d 293 (2000), aff’d, 257 Conn. 118, 778 A.2d 1 (2001). ‘‘In determining whether there has been an abuse of discretion, every reasonable presumption should be given in favor of the correctness of the court’s ruling. . . . Reversal is required only where an abuse of discretion is manifest or where injustice appears to have been done.’’ (Internal quotation marks omitted.) Rivera v. St. Francis Hospital & Medical Center, 55 Conn. App. 460, 463–64, 738 A.2d 1151 (1999). ‘‘[W]e do not . . . determine whether a conclusion different from the one reached could have been reached.’’ (Internal quotation marks omitted.) Davis v. Fracasso, 59 Conn. App. 291, 295, 756 A.2d 325 (2000).

The defendants claim that the court improperly refused to set aside the verdict because a bankruptcy stay voided all trial court action between the filing for bankruptcy and the bankruptcy discharge, and those void actions rendered the jury verdict void as well. We agree.

‘‘In general, we look to the federal courts for guidance in resolving issues of federal law.’’ Turner v. Frowein, 253 Conn. 312, 340, 752 A.2d 955 (2000). ‘‘[T]he decisions of the federal circuit in which a state court is located are entitled to great weight in the interpretation of a federal statute.’’ (Internal quotation marks omitted.) Thomas v. West Haven, 249 Conn. 385, 392, 734 A.2d 535 (1999).

The automatic stay provision in bankruptcy proceedings is governed by 11 U.S.C. § 362.5 ‘‘Section 362 of the Bankruptcy Code stays any and all postpetition filing. Any filing constitutes a judicial act directed toward the disposition of the case in violation of the automatic stay. . . . The stay of section 362 is extremely broad in scope and . . . should apply to almost any type of formal or informal action against the debtor or the [debtor’s] property . . . . 2W. Collier, Collier on Bankruptcy (15th Ed. 1979) § 362.04.’’ (Citation omitted; internal quotation marks omitted.) Citicorp Mortgage, Inc. v. Mehta, 39 Conn. App. 822, 830, 668 A.2d 729 (1995).

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Click the case caption above for the full text of the Court's opinion.

Outcome: On the defendants’ appeal, the judgment is reversed and the case is remanded for a new trial; the plaintiff’s cross appeal is dismissed.

Plaintiff's Experts: Unavailable

Defendant's Experts: Unavailable

Comments: None